VZCZCXRO2224
PP RUEHFL RUEHNP
DE RUEHRO #0827/01 2020839
ZNR UUUUU ZZH
P 210839Z JUL 09 ZDS
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 2409
INFO RUEHNP/AMCONSUL NAPLES 3925
RUEHMIL/AMCONSUL MILAN 0151
RUEHFL/AMCONSUL FLORENCE 3721

UNCLAS SECTION 01 OF 03 ROME 000827 
 
C O R R E C T E D  C O P Y (added / corrected PARA classifications) 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EFIN ECON IT
SUBJECT: ITALY 2008 REPORT ON INVESTMENT DISPUTES AND EXPROPRIATION 
CLAIMS (527 REPORT) 
 
REF: STATE 49477 
 
ROME 00000827  001.2 OF 003 
 
 
¶1. (U)  Embassy is aware of four (4) outstanding expropriation cases 
concerning the estates of United States citizens of Italian descent 
against the Government of Italy for the expropriation of property. 
For Claimant A, there is only one up-date from the Embassy's report 
of last year. There is no up-date on the situation of Claimants B 
and C. Claimant D is a new case. 
 
CLAIMS 
------ 
 
¶2. (SBU) 
  a. Claimant A 
 
  b. 1974 - 1980 
 
  c. The estate of claimant A, a U.S. citizen who died in September 
1997, alleges that real property in and around Rome, held by a 
number of Italian companies he owned, was expropriated by the City 
of Rome beginning in January 1974 and continuing through September 
¶1980.  The court-appointed "Special Administrator" of the estate of 
Claimant A has continued to pursue this claim and maintains that the 
City of Rome failed to compensate Claimant A the fair market value 
of the property in contravention of the 1948 Treaty of Friendship, 
Commerce and Navigation (FCN) between Italy and the United States. 
Claimant A initiated legal action in Italian courts in 1983, seeking 
fair market value compensation for his property.  The trial court 
dismissed this claim.   Claimant A appealed unsuccessfully.  The 
case was finally rejected in 1994 by Italy's Supreme Court of 
Cassation. 
 
The Department of State has taken steps to try to evaluate and 
promote resolution of this claim.  The Department has, inter alia, 
sought information from the Special Administrator concerning 
Claimant A's claim, including about the nature of Claimant A's 
ownership interests in the disputed property and in the companies 
that apparently held direct ownership of the property, and urged the 
Government of Italy to negotiate a resolution of this matter 
directly with the Special Administrator of Claimant A's estate. 
 
The Special Administrator of Claimant A's estate visited Rome in May 
2001 and requested the assistance of the U.S. Embassy.  Embassy 
officials put the Special Administrator in contact with the Ministry 
of Foreign Affairs Legal Department, which had responsibility for 
Claimant A's case.  In 2002, the Ministry of Foreign Affairs (MFA) 
informed the U.S. Embassy in Rome that the Italian Government viewed 
this case as closed. 
 
In June 2003, the Special Administrator and a consultant to the 
Administrator met with the Ambassador at their request.  The Special 
Administrator and the consultant asked the Embassy to send a 
diplomatic note to the Ministry of Foreign Affairs requesting a 
review of the case, which the Embassy did upon Department 
instructions. 
 
In a December 29, 2003 diplomatic note (received late January 2004), 
the Ministry of Foreign Affairs argued that the property subject to 
expropriation belonged to two Italian companies, of which Claimant A 
was the major stockholder, but not to Claimant A himself.  Since the 
entities in question were Italian and, therefore, subject to Italian 
law, the MFA argued that the United States could not espouse the 
claim under the 1948 FCN Treaty.  The Ministry of Foreign Affairs 
also contended that the United States could not espouse the claim of 
an Italian citizen, arguing that Claimant A, born in Italy, retained 
his Italian citizenship even after he had acquired American 
citizenship.  The Ministry of Foreign Affairs therefore reaffirmed 
its conclusion that the case was closed. 
 
In autumn 2003, the Special Administrator and an informal advisor 
contacted the White House and the Nevada delegation of Congress to 
inform them about the case.  In February 2004, the Embassy informed 
the Office of the General Counsel, the White House, as well as the 
Office of the Legal Advisor of the State Department, of the December 
29, 2003 Italian diplomatic note.  The Office of the Legal Advisor, 
Department of State, shared with the Special Administrator the 
December 29, 2003 diplomatic note. 
 
After further review of the December 29, 2003 diplomatic note and in 
close consultation with the Special Administrator, the State 
Department issued instructions to the Embassy to send another 
diplomatic note to the Ministry of Foreign Affairs responding to 
specific points and again requesting a review of the case.  This 
diplomatic note was sent to the Ministry of Foreign Affairs in 
November 2004, and the Ministry of Foreign Affairs provided a brief 
response dated March 15, 2005, reiterating the Government of Italy's 
position that the case was closed. 
 
On March 17, 2005, the Special Administrator visited Embassy Rome. 
Embassy officers had previously secured appointments for the Special 
 
ROME 00000827  002.2 OF 003 
 
 
Administrator with officials in the Office of the Prime Minister and 
the Foreign Ministry, but the Special Administrator subsequently 
asked that the meetings be canceled because of the March 4 Calipari 
(Iraq hostage) incident. 
 
On September 12, 2006, the United States sent another Diplomatic 
Note urging a satisfactory resolution of the dispute.  The Ministry 
of Foreign Affairs responded via Diplomatic Note dated December 27, 
2006, reaffirming its earlier positions.  The Note stated, in 
particular, that it had not been proven that the American 
citizenship of Claimant A was "predominant" over his Italian 
citizenship, therefore, the claim was an Italian claim.  The Note 
contended that that the Protocol to the 1948 FCN did not define who 
is entitled to benefit from diplomatic protection, therefore, a U.S. 
ownership of an interest in an Italian entity would not be entitled 
to protection under the FCN or its Protocol. 
 
In April 2007, the Embassy received a letter from Senate Majority 
Leader Harry Reid notifying the Embassy that the Special 
Administrator planned to come to Rome and requesting that Embassy 
officials assist the estate representatives in obtaining an 
appointment at the MFA to discuss the estate's claims.  Despite a 
letter from the Ambassador requesting that they meet with estate's 
Special Administrator representatives, MFA officials declined to do 
so. 
 
The Office of the Legal Advisor has requested the Special 
Administrator to provide it with a number of documents, as well as 
more information, in order to assess the feasibility of espousing 
the claim against the Italian Government. 
 
In May 2009 the Special Administrator advised the Embassy it was 
seeking a meeting with the Italian MFA. The Embassy requested the 
MFA to meet with the Special Administrator, but the MFA declined to 
do so. 
 
¶3. (SBU) 
   a. Claimants B 
 
   b. 1960-1972 
 
   c.   Claimants B claim the City of Bari expropriated 22,000 
square meters of land from them and paid for only 10,000 square 
meters.  The City states that the Claimants must get additional 
payment from the party that built on the land, the Instituto 
Autonomo Case Populari (IACP).  The IACP apparently wants to pay a 
much lower price than the Claimants' lawyer is seeking.  Claimants' 
attorney brought suit.  In July 1998, the Bari court requested a new 
survey to determine the exact size of the area expropriated and a 
new estimate of the value of the property.  A court decision was 
rendered in September 2002, in which the U.S. Claimants were awarded 
1.89 million euros, and an additional 18,000 euros for legal 
expenses.  According to Italian law, the affected party, IACP, may 
appeal the decision. 
 
Consulate Naples was contacted in November 2002 by the attorney 
representing the American Claimants.  The attorney asked for 
Consulate Naples' intercession with IACP.  Consulate Naples advised 
the attorney that the Consulate could not interfere in the legal 
process.  Records do not indicate why the attorney sought Consulate 
Naples assistance, since the Claimants had received a favorable 
ruling in September 2002.  Consulate Naples has not had any contact 
with the Claimants since 2002. 
 
¶4. (SBU) 
   a. Claimant C 
 
   b.  1998 
 
   c.  Claimant C claims the city of Bari expropriated property 
owned by her in 1998.  In 2006, the Claimant advised the Department 
of State that she was in the process of appealing an administrative 
tribunal's valuation of the property seized.  In May, 2006, the 
Consul General Naples offered diplomatic assistance in determining 
the status of her case and provided a list of English-speaking 
attorneys as additional resources.  The last contact with Claimant C 
was in 2007. 
 
 
¶5. (SBU) 
   a. Claimant D 
 
   b. unknown at this time 
 
   c. Claimant D bought a car factory in Arese, Northern Italy, a 
few years ago. Soon after acquisition of this property, Claimant D 
was told that along with the property it had also acquired the 
obligation to rehire a number of the auto workers who had been laid 
off by Italian company Fiat/Alfa when these companies closed the car 
factory. Claimant D resisted such obligations, but under pressure 
from local politicians and unions, Claimant D hired some of the 
workers and compensated or settled claims with others. As of 
 
ROME 00000827  003.2 OF 003 
 
 
December 2008, there were only a few remaining workers from the car 
plant who refused to settle.  The Italian courts involved supported 
Claimant D's position. It appears that the case may be moving 
towards a settlement favorable to Claimant D. 
 
IDENTITIES OF CLAIMANTS 
----------------------- 
 
¶6. (SBU) Identities of claimants are protected under the Privacy Act 
of 1973 and cannot be released without permission of the claimant. 
 
Claimant A 
 
Name: Pier Talenti 
Citizenship: Naturalized American citizen (May 15, 1961) 
Privacy Act Waiver: unknown 
 
Claimant B 
 
Names: Francesco Scavelli, Antonio Scavelli, Germano Scavelli, and 
Bernardo Scavelli 
Citizenship: American 
Privacy Act Waiver: None 
 
Claimant C 
 
Name: Maria La Cedra 
Citizenship: American 
Privacy Act Waiver: unknown 
 
Claimant D 
 
Name: AIG Lincoln 
Citizenship: U.S.-based company 
Privacy Act Waiver: unknown 
 
DIBBLE